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  • Writer's pictureGoldstone Group

The Show Must Go On: Finding an Alternative Road to Recovery Through SMEs & Impact Entrepreneurship

Updated: Jun 20, 2023

In 2020, we experienced an economic downturn five times that of the average recession since the Second World War – in only a quarter of the time. It was a global decline that was unprecedented both in its scope and in the response that it demanded from governments around the world, notably the United States which increased its deficit more in just three months than in the last five recessions combined. While the battle against the pandemic will continue throughout 2021, the widespread success of vaccines brings a more hopeful mission to the forefront, one that commits to not simply economic recovery, but to rebuilding a stronger, more resilient economy that will thrive in a post-pandemic world.

By May 2020, the United States Congress had already approved approximately $2.4 trillion in response to the catastrophic effects of the pandemic. In just two months, the government had spent trillions to bail out businesses and industries and to mitigate the rapidly growing rate of unemployment across the country. The historic government funding was closely followed by Europe where the European Central Bank (ECB) announced its €750 billion Pandemic Emergency Purchase Programme. In a tweet accompanying the news of the programme, President of the European Central Bank, Christine Lagarde stated, “Extraordinary times require extraordinary action. There are no limits to our commitment to the Euro”. 2020 was a truly extraordinary time and with President Joe Biden’s $1.9 trillion stimulus bill now signed into law and the ECB recently announcing that it will accelerate the rate of bond buying over the next three months in response to the rising cost of borrowing and the dragging pace of economic recovery, it is evident that 2021 will be just as – if not even more – extraordinary. But what are the consequences of these solutions that depend on reflation and pumping stimulus money into the global economy? And could the risks undermine the post-pandemic recovery initiatives that these funds are supposed to support?

Policies of reflation have plunged the world into a dramatically increased state of liquidity. With growing piles of cash steadily decreasing in their real purchasing power, the risk of inflation is concerning. While the printing of money does not always have to be inflationary – if the amount and character of the credit contraction are offset by the amount and character of the money creation, the risks can be mitigated significantly – the balance is not an easy one to achieve, and already, we can see that through negative real yield, cash and bonds are damaging wealth across the globe.

Beyond the act of printing money itself, the way in which the money is being spent – to fund government debt and lost income as opposed to making productive investments – is destructive to the value of currencies especially at a time of decline when the nominal return from holding bonds is next to nothing. Further to this, it is concerning to note that there isn’t an asset that hasn’t, at some point in history, experienced a drop in real purchasing power of up to 50 to 80 per cent. This includes cash which, in terms of holding this value, has always been a risky and unstable asset to hold.

But it’s not all bad news. Thanks to rapid developments in technology, innovation and entrepreneurship, there is a different path to recovery that we can follow that doesn’t depend on reflation; it is a roadmap based on an alternative growth model that will drive us towards a more sustainable and inclusive economy and one that will be led by one of the cornerstones of the global economy today – small-medium enterprises (SMEs).

Playing a fundamental role in national economies around the world, SMEs contribute to 50 per cent of the global gross domestic product and account for 90 per cent of all businesses and 70 per cent of all jobs.[1]Considering the UN’s Sustainable Development Goals (2017), which call for the creation of 600 million new jobs by 2030, there is room for the establishment of 60,000 new companies of 10,000 employees each. It’s a sizable opportunity for the SME sector to expand even further and one that is already being recognized and seized by entrepreneurs around the world.

Beyond the realm of venture capitalism, there is a booming $300 billion dollar industry made up of highly profitable businesses, many of which started out as “side-hustles”. Empowered by advancements in technology and marketplace platforms such as Amazon, which give small companies invaluable access to national and global markets, savvy entrepreneurs have been able to take these side-projects and successfully grow them into multi-million-dollar businesses. As these businesses scale, so do their needs for resources to support their growth; larger companies demand greater and more complex operational infrastructures including teams and systems to manage administrative tasks, human resources, finance and accounting, supply chain management, logistics, marketing and communications etc.

With strong and effective leadership, the business sector has the potential to be a powerful driver of not just a society’s wealth but also, its wellbeing and happiness. With the pandemic exposing major inequalities in our society and bringing widespread attention to social and economic crises around the world, implementing corporate impact strategies is not only becoming more popular but even necessary for businesses to excel in this increasingly conscious world. The long-standing idea that the best route to “doing good’ is focusing solely on accumulating profit before donating large sums of money to philanthropic causes is on its way out. Impact entrepreneurship is proving that businesses have an important and active role to play in striving for positive change and that it is both commercially possible and preferable to work towards this at the same time as chasing growth and profit.

There is no denying that the pandemic has shaken the world’s economy to its core. But as well as wreaking havoc on our economic structures, it has also presented us with the opportunity to reimagine them in more sustainable and inclusive ways. We now have the chance to harness the potential presented to us by a certain booming SME sector and to combine this with the growing emphasis on impact entrepreneurship in order to not simply rebuild our economy but revolutionise it for the betterment of society and the world.


Goldstone Group is a London-based financial advisory boutique. We specialise in close-ended portfolio management and aim to be the global premium provider of technology and data solutions, facilitating investments within the digital economy.

We offer bespoke advisory services at all stages for companies looking to refine corporate strategy, development and structuring, as well as guidance on expansion in Europe and Asia, including fundraising and M&A strategies, where our investigative due diligence research plays a pivotal role in our success.

Our team brings anti-money laundering (AML) experience. We advise on KYC frameworks and help businesses manage reputation and compliance risk, as well as regulatory requirements.

[1] Include reference to UN source.



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